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APAR's WORKING WEEKEND: Break Down the Wall-to-Wall Paranoia

2 Mar, 2001 By: Bruce Apar

We recently had occasion to approach a digital-media executive with an invitation to keynote a conference. The executive’s purview is digital delivery of content such as movies. The audience for his talk would be companies and individuals involved in the manufacture of optical media such as DVD and CDs, and analog media such as video and audio tapes.

Our thinking was that it would be highly informative, not to mention valuable and productive, for those who produce packaged media to hear how the same content that they churn out in hard-copy media will be delivered electronically direct to desktop or set-top boxes.

The digital executive, after consulting the company’s marketing people, related to us that they believed such an audience would not be "a good environment" for his spreading the gospel of digital delivery. As soon as I heard this reaction, I couldn’t help but let out a loud groan.

I’m not so dense as to be blind to the self-centered interests of those charged with creating a major new business model such as video-on-demand, for even within the entertainment conlogmerates in Los Angeles that used to be mere movie studios, there are battle royales being joined.

The infighting is between sister divisions that control VHS and DVD distribution on one side, and those responsible for exploiting much the same intellectual property in electronic-delivery channels such as the Internet, satellite and cable.

At the same conference, one of the keynote speakers is from a leading music-download brand, which apparently doesn’t have the same apprehension about commingling online with offline delivery. It smartly recognizes we are all in the same business of home entertainment, whether pre-recorded or downloaded, audio or video, analog or digital, linear or interactive. There are innumerable new business opportunities to be had from joining forces instead of trying to build fences around yourself. Some of those have surfaced, such as using CDs or DVDs sold in storefronts as navigation tools for directing consumers to related Web sites.

Being a 28-year member of the home entertainment industry, I know darn well that among those who’ve sweated to make a living and endure in it are ghetto-dwellers who reflexively want to retard, if not block, the progress of any technology they can’t perceive as adding to their own pocket. It’s not to say they can’t profit off new entertainment technology; just that if they can’t see how it would work, it is de facto demonic in their eyes.

In this cynical regard, retailers have nothing on their natural antagonists in charge of digital delivery at movie studios. On the supply side, too, new-media divisions employ some people of myopic vision who can’t reconcile how their shiny, futuristic technologies can benefit from rubbing elbows with dusty media such as DVD, which is so not-new economy, dahling.

It’s that kind of insular view of a marketplace or technology that dries up potential new revenue streams before they can get flowing. Who says video-on-demand is not, in fact, additive to current forms of movie delivery instead of cannibalistic? Or that DVD is not a booster platform for video-on-demand? Nobody knows, and the only way to find out and test the model properly is to collaborate with as many knowledgeable and experienced market players as possible, whether they are squarely in your camp or not. Hence, Blockbuster’s partnerships with Radio Shack, for hardware, and with Enron, for delivering movies any way that its customers choose to rent or purchase them.

If you’re on a marketing team at a company trying to get a future piece of the consumer’s home entertainment dollar, why on earth wouldn’t you want to find out as much as possible from the market sector that is dominating that disposable income at the moment, namely VHS and DVD. And why wouldn’t you want to assure that market they have nothing to fear except their own lack of imagination and provincialism. That’s how we self-centeredly see it, anyhow, when we offer an invitation to a digital-delivery decision-maker to speak in front of aliens from the world of physical distribution. The two will not only co-exist, but will overlap.

A video-on-demand executive quoted in the March 4-10 issue of Video Store Magazine’s Upstream department, Terrence Coles of Interntainer, notes that retailers still are the 800-pound gorilla in home entertainment, while program suppliers are "in the business of making money off titles as many ways as possible."

Break down the barriers, we say -– to entry in the home entertainment marketplace, and to each other’s brainpower. There’s enough here for everybody to make money as many ways as possible. Or, at least enough for those who know how to share. .

Comments? Contact Bruce directly at:bapar@advanstar.com

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